Defence One forecasts major arms race as Asia-Pacific scrambles to counter China

A massive arms race is sweeping the Asia-Pacific region as countries like Australia grow alarmed over the China threat.

A massive arms race is sweeping the Asia-Pacific as nations like Australia scramble to meet an increasingly dominant and assertive Chinese military.

US-based Defense One forecasts military spending across the vast region, stretching from India to Japan, to jump from about $800bn in 2024 to more than $1.1 trillion in 2029 as China continues to build up vast arsenal of boats and planes and smaller countries race to fortify their own defences.

“China serves as the instrumental element in Asia-Pacific defence market growth, and with the world’s second-largest defence budget, continues to set the pace for the region,” the news and analysis service states in its recent Global Snapshot assessment.

“That pace and its strategic security implications has a profound ricochet effect on the rest of the regional actors.”

China spent $365bn on defence in 2024, accounting for nearly half of all expenditure in the region.

A Chinese warship conducted live-fire drills in the Tasman Sea last month. Picture: Supplied.

“It should be noted that many experts believe that China’s cumulative defence budget is far higher than official figures provided by Beijing,” Defense One said.

“Elements such as military technological research and development and even some major weapons purchases are kept off-budget, thus raising actual defence investment figures to well beyond the official top line number published by the Chinese state.”

Australia, by contrast, spent just $58.3bn in 2024.

Near-term expenditure, however, is expected to jump to $76.5bn each year through to 2033-34.

Other nations are also ramping up defence spending.

“Japan continues to rapidly increase its top-line defence spending levels since launching a Defense Buildup Plan in December 2022,” Defense One states.

“The DBP calls for spending JPY43 trillion ($476bn), an average of $95bn per annum, from 2023 through 2027.

“The ultimate aim is to bring defence budgetary levels up to 2 per cent of GDP from the country’s longstanding informal cap of 1 per cent or less of annual GDP earmarked for the military budget.

“By effectively doubling its defence budget Japan will remain one of the highest military investors in the Asia-Pacific and the world.”

The arms race comes as both sides of Australian politics warn the country is facing a deteriorating security environment.

Last month, China sent war ships to circle the Australian coastline and conduct live-fire drills.

In a foreign policy address to the Lowy Institute on Thursday, Opposition Leader Peter Dutton said Chinese President Xi Jinping sent the ships to “test” Australia’s response.

“It was a show of force,” Mr Dutton said.

Opposition leader Peter Dutton discussed his foreign policy vision at The Lowy Institute on Thursday. Picture: NewsWire / Nikki Short

“It was contempt, because Papua New Guinea had been provided with warning, whereas the Australian government was not.”

Mr Dutton said the exercise revealed a “critical failure in our response capacities.”

In his speech, the Liberal leader said he would take a more assertive approach to aggressive actions from the rising superpower.

“A healthy bilateral partnership is in China and Australia’s mutual interests,” he said.

“But time and again, the Albanese government has failed to call out the Chinese Communist Party’s military aggression against our men and women in uniform … Australia must be willing to criticise any nation whose behaviour imperils stability in the region.

“And that’s what a Coalition government I lead will do confidently and in concert with other like-minded countries.”

Originally published as Defence One forecasts major arms race as Asia-Pacific scrambles to counter China